Charity Development Fundraising Blog

As I mentioned in the last blog, the expertise of the car donation field lies in the handling of donated vehicles. Anyone can get a car towed to a wholesale or salvage auction and have it sold. But those of us in this field who work closely with charities know that we can make a huge difference when we do a good job processing a donated car. In fact, we can make the difference between a healthy donation to a charity – or just lunch money.

I have a video I want to share with you because I think it illustrates what I’m talking about.

Should we recycle it for parts and crush the rest? Should it be sent to a wholesale auction? Or is there something about this neglected old VW Camper Van that might capture the heart of a buyer? And then, once that heart is captured, bring in more money for the charity the van was donated to? What’s your estimate of the value?

We sold it for almost $700, even though, if you’ll look closely, you’ll see it has no intact motor.  Yet, it’s a VW van restorer’s dream. We knew there would be someone who would love this old VW!

And here’s what we’ve learned. With the right vehicle, knowledge, care and effort, we can sometimes increase a vehicle donation value by 450 % (percent). We did it with this old VW. Sending it to be recycled would have brought in about $150 at most instead of almost $700, which we sold it for.

2005 Ford E-350 donated to charity

We do the same thing, too, with high-end vehicles. The Sportsmobile mentioned in a previous blog is a good example of this. Because we screened it out, we sold this 2005 Sportsmobile, which had a high bid at auction of $14,700  — which we declined, instead bringing the van into our retail program --  for $50,000. This was about a 350 % (percent) increase in sale price.

Whether an old or a new car, there’s a common thread between these two donations: both went to retail and both sold for 350 % (percent) to 450 % (percent) more money because of that.  — What do you think that meant to the charity or to the bottom line for the van donor’s tax deduction?

We receive many thousands of donated vehicles — cars, vans, trucks, boats, you name it – and from the beginning we’ve refused to take the lazy route of simply shipping them off to either salvage or wholesale auction when a vehicle deserves better.

– The only way to change an industry is by example
Tim

The majority of donated vehicles across the nation go straight to wholesale and salvage auction. For some of these vehicles, this is the most profitable route, but here’s the important thing to know: wholesale auctions are not the best route for all donated vehicles.

Camry on the left is just too good for a wholesale auction, but wholesale auction is the best route for the Camry on the right.

Some vehicles are just too good for a wholesale auction. They’re typically more valuable vehicles that will sell for more if we route them through retail outlets. It’s just plain unprofessional to send these kinds of cars through a wholesale auction.

Bottom line for the charity is: A higher vehicle sales price means more money to the charity.

You’ll often hear me talk about the problem of car donations being sent straight to auction, but with this caveat: wholesale car auctions do valuable and professional work. They’re simply utilized wrong (or out of laziness) by too many in the car donation arena.

In fact, I can tell by evaluating the 54 car donation cases tracked by the General Accounting Office Report on Vehicle Donations that these were probably all wholesale and salvage auction cases. The low final donations to charities are one indication of this. Another is the discrepancy between the donor’s assessed value and the actual sales price of the donated vehicle.

Valuable Car Donations Often Overlooked

Too often, car donations are received by a phone bank, picked up by a tow service and sent directly to wholesale or salvage auction. No one actually looks at the vehicle, and no charity-related auto professional screens it to evaluate its value.

This lack of screening is the first thing we must deal with in the car donation arena. It is the hub of the problem addressed in the GAO Report and the resulting Grassley Bill. The difference this one simple step can make to a charity receiving the donation is enormous.

The GAO’s Graph Explains the Typical Route of a Vehicle Donation

The General Accounting Office Report gave us a telling graph on the typical route of a vehicle donation. In its example, the charity received just $31on a vehicle with a value of at least $1,500. (For more on this valuation, see the discussion in our previous blog.)

GAO Graph illustrates a typical wholesale or salvage auction route

Now let’s take a look at the possibilities – the donation opportunities – that are being missed when vehicles go this easy route and are sent directly to wholesale or salvage auction. Using the standard fees quoted by the GAO report and as shown in the graph, look at the difference the sales route made for this truck and for the charities we serve (The truck sold recently for the price quoted):

1978 Ford F250 Illustrates Great Donation Opportunities, Too Often Missed

1978 Ford F250

We sold the 1978 Ford F250 shown here for $1,800 last year. After GAO quoted expenses of $313 and our 10% fee, the charity receives a $1,307 donation.

$50 – If this truck had been sent through the standard wholesale auction route noted in the GAO Report, the charity may have been left with about a $50 donation.

$1,257 – The extra steps we take to evaluate and sell the vehicle gets our charities more money. In this case, $1,257 more.

We have many, many more examples we could share, but you get the picture. Screening these trucks out of an easy route to wholesale auction means much higher donations to the charities we serve.

The numbers tell the story. Vehicle Donation professionals must begin now to take the responsibility to screen donations and then utilize the absolute best channels for vehicle donation sales. Charities are counting on us, and we owe them our best.

– The only way to change an industry is by example
Tim